What follows are some lessons to guide the mining industry.

Lesson 1: The challenges now faced by the mining industry are general, not specific

Many in industry, especially in the mining industry—view their plight as unique. They wonder what they could have done to avoid the problems they now face. But that misses the point. Those who vilify the mining industry aren't annoyed with the industry itself; they're annoyed with economic and technological progress in general. It's not personal.

Certainly, mining is under severe attack around the world—the Ok Tedi mine in Papua New Guinea, and the Freeport McMoRan mine in West Irian, Indonesia are typical examples. Once lauded as bringing economic growth to the most isolated areas of the globe, the mining industry is now condemned for invading the Garden of Eden, for destroying long-established indigenous cultures.

To some extent, each of these situations reflect the long understood problem of "sovereign risk"—that is, the possibility that a nation state might modify the original legal and economic agreements which justified the initial investment. Nationalization and other sovereign risks are well understood for investments throughout the Third World. Ironically, such sovereign risk factors have become serious even in the developed world. The New World Mine near Yellowstone National Park is just one North American example of this problem.

But the problem is not mining per se. Mining is under siege largely because profits from this sector continue to justify expansion, putting it in direct conflict with the anti-growth, anti-technology movement. Any company that seeks to open new mines or expand older ones will encounter difficulties.

Indeed, the problems that the industry faces extend far beyond those associated with opening new facilities. Mining is also under attack on the grounds that minerals are inherently dangerous; that metals, in particular, are "toxic" materials that threaten the life and health of all species. Even the relatively non-controversial National Pollutant Release Inventory (NPRI), a measure that requires each facility to incriminate itself as a producer of "toxic" materials, may soon burden the mining industry. Regulators have extended the NPRI to mining, a move that has branded this industry as one of society's greatest sources of hazardous waste. The NPRI does not distinguish between truly dangerous and relatively harmless materials, nor does it differentiate between materials left on site, and those that migrate to the properties of others.

The attack on mining is not exceptional. Forestry finds itself under attack because of endangered species concerns. The chemical industry's very existence is threatened by claims that chlorine chemistry is mimicking various sex hormones, undermining the survival of life on earth. Packaging is seen as a wasteful form of material exploitation that should be regulated out of existence. Automobiles are, of course, a source of distasteful externalities, and the oil industry is attacked on all fronts—one recent dramatic example being the successful assault on Shell's decommissioning of the Brent Spar oil platform in the North Sea. Oil field development has been effectively eliminated from the continental United States. Exploration rights exist only in pre-explored areas, and in parts of the Gulf of Mexico. For all these reasons, a certain amount of paranoia in the mining industry is understandable.

The problems facing the mining industry do not result from an inherent weaknesses in the industry, nor from environmental or social failures. Rather, the problems are the result of a small but influential group, motivated by an intense distaste for modernity and for technological and economic change, who view economic and technological growth negatively. Their value perspective makes it very hard for them to sympathize with any activities of the mining sector.

There's a war raging between those who believe that technological and economic growth are dangerous to the future, and those who believe that civilization is best maintained by increasing resiliency through economic progress and technological change. The former world view, supported by many of the more extreme environmentalists, might be called the Terrible Toos: there are too many people; we consume too much; and we rely too heavily on technologies which we understand too poorly! Their solution? Roll back the clock to a simpler era and slow significantly the rates of technical and economic change. The environmentalists who espouse these views are wrong, but their beliefs are strong. And they have become increasingly powerful as we and other nations have joined the ranks of industrial civilization.

Unfortunately, overly zealous environmentalists are far more powerful than their numbers would suggest. A recent book, Environmentalism at the Crossroads, <Jonathan Adler, Environmentalism at the Crossroads, CEI under the auspices of the Capital Research Center.> documents the size and growth of the modern environmental movement. It reveals that the leading 10 or 12 groups now command over $600 million dollars in annual revenues and can call upon tens of thousands of volunteers and allied groups throughout the world. It is disturbing that while business commands far greater resources and employs far more people, the environmental establishment has thrashed the business community in the political arena. This has much to do with the fact that most business resources are devoted to producing goods and services—not to affecting the political climate.

The media has not helped industry's case either. They view industry as a Goliath in the age-old battle between good and evil; the Greens are the noble Davids challenging the greedy Philistines. But in a very real sense, industry is outgunned dramatically in the political battlefield. Consider the challenge to Shell Oil by Greenpeace in the Brent Spar case—Shell is a $100 billion plus organization; Greenpeace, a $100 million plus organization. Yet who was the David, and who the Goliath? The challenge is not merely monetary; the media looks far more sceptically on information and policy statements made by economically-motivated "private" interest groups. They are far more receptive to arguments made by "public" interest groups having "only" an ideological stake in the outcome.

Lesson 2: Industry's current strategy— let's reach an agreement through consensus—can't work

Too often, the business community seeks to appease its critics by capitulation, by premature cringing. This is not wise. Firms often defend their environmental record like this: We once produced x wastes, we're now down to 50 percent of that amount, and our plans are to reduce wastes by another 10 percent over the next decade. By the twenty-first century, pollution will almost be eliminated! Expecting applause, they are puzzled at the silence.

Why doesn't this method work? To those sceptical of business, the above "defense" sounds something like this: "Yes, I beat my spouse, but I've cut down dramatically over the last decade. Last year, beatings were reduced to once a week and by the 21st century—why, I'll be too old to beat anyone at all!" One doesn't get moral approval for doing less of something you shouldn't be doing at all. If you are doing something bad, then you should stop!

Mining doesn't produce waste!

This approach cedes the moral high ground to your detractors. Why apologize for pollution? After all, mining doesn't "produce" waste; it produces ores and metals, commodities which have made the world a better place. Obviously, when energy and materials are converted from one form to another, there are left-overs. Mining and refining are material-intensive processes that leave behind vast quantities of materials. But these are unavoidable by-products of a positive activity; mining executives do not wake up each morning wondering how they can increase their output of tailings. The mining industry should not be trapped into rhetoric which suggests such a goal.

Furthermore, this rhetorical confusion also equates "emissions" with "pollution." We should not try to eliminate residuals, but ensure that they are properly managed—ensure that trash is not dumped on another's yard, that all material flows are managed by contracts between consenting adults. Pollution and emissions (residuals) are two very different things, and they should not be confused, even if to the US Environmental Protection Agency (EPA) there may be no difference. (One of the major problems of the US Toxic Release Inventory, and the Canadian National Pollutant Release Inventory modelled after it, is this confusion. Rather than reporting those emissions which accidentally or inadvertently flow off-premises to the properties of others without their consent—that is, the level of pollution—the EPA requires that all emissions be reported whether these residuals are carted away by a contracted waste disposal agent, remain on site, or are accepted (possibly for compensation) by an adjacent property owner. Under TRI, wastes are emissions!) The rhetorical translation of "tailings" into "wastes" is a very dangerous cultural transformation which the mining industry should strongly resist.

Beware slogans

It is also important to be careful in endorsing environmentalists' slogans: waste reduction, zero emissions, eco-taxes, full-cost pricing, life-cycle analyses, sustainable development, the precautionary principle, win-win environmental strategies, and so on. These ideas seem rational to those unfamiliar with business practices, but in reality, they do not meet the needs of successful business operations or effective environmental protection.

The history of market economies is one of vast energy and material savings over time; consider the shift from copper to fibre optics. Tons of copper have been replaced by pounds of sand. However, be careful about seeing such residual reduction efforts as good in themselves. For example, calls for energy efficiency or materials efficiency are misguided. The mining industry's goal should be economic efficiency. That may entail energy and/or material efficiencies, but if these inputs are relatively abundant compared to labour or capital, they should be substituted for the more expensive alternatives. In colonial America, furniture makers produced chairs using a very different labour/material mix than their counterparts in England. Wood was abundant in America; skilled labour was scarce. The result was a far more wood-intensive technology in the colonies than in England. Yet wood was not "wasted" in the colonies; labour was conserved.

The rhetoric of the environmental/resource debate has been carefully crafted by the environmental movement to place business on the defensive—and many within the business community have fallen into this trap. The only way to achieve many of the objectives of the more extreme of the environmentalists is to cease operations.

Lesson 3: Communicating in a world of rational ignorance

Many business people believe that facts will win the day. Business leaders operate in a rational world where information is the difference between success and failure. You can believe in a mining site as much as you want, but if the gold isn't there, then it isn't there. This focus on facts means that business people often neglect the political motivations of others.

Business leaders believe that if they can just educate the public about the true risks of mining—about its real impacts on the environment, about the safety and the environmental care built into modern mining techniques—then the opposition will melt away. For some situations, this is true. For risks that are relevant, people will take the time to become informed (window washers will know much about ropes and walkways, scuba divers about decompression, farmers about tractor rollovers, miners about ceiling stability and ventilation adequacy). In general, workers know the risks of their jobs and rationally demand (and receive) appropriate risk compensation.

In contrast, many risks in society are irrelevant to most people. There are many risks in the world that only marginally affect each of us. Moreover, for those risks addressed in the political world, our ability to exert influence is minimal. It is not rational, therefore, to spend a lot of time educating ourselves on the facts of specific risks. The result is somewhat surprising: most people know far less about the elements that affect their lives than did individuals in primitive tribal societies. Most people are rationally ignorant!

Today, there are too many things to know, about most of which we can do too little; thus, we remain blissfully unaware (save those of us who study the subject) of the facts behind the fears of asbestos, copper, lead, and dioxin. The idea that public participation or educational campaigns will fix this problem is foolish. The world cannot be run as a series of town hall meetings, despite the romantic attraction such tribal customs still elicit. The British playwright, Oscar Wilde, noted in this regard that the problem with socialism was that it takes far too many of one's afternoons! Most people are busy and therefore most people are rationally ignorant.

Still, people have opinions, as we're told daily by our pollsters. But if facts do not inform these opinions, what does? The late Aaron Wildavsky argued that political opinions are generally proxies for more basic values. <See Aaron Wildavsky, The Rise of Radical Egalitarianism (Washington: American University Press, 1991).> To Wildavsky, political issues were akin to inkblots—amorphous entities into which we read arguments for or against our basic values—and respond accordingly.

One mining executive made this point well at a mining association annual meeting. He noted that in his offices are large photos of mining operations—large excavations, aerial shots of refineries, pictures of massive equipment. To mining executives, these images convey progress. They are positive images of a proud company doing what it does best. Similar pictures also appear in the offices of various environmental groups, but they symbolize something very different. In that context, the pictures show the raping of the earth, its invasion and deterioration, the destruction of life. The same image conveys a very different message.

For such reasons, values, not facts, dictate most people's views about most political issues. But what values? Wildavsky viewed such "value" orientations as largely given—not readily changed by argument—and suggested that the public policy community displayed three primary orientations: "fairness," "freedom or choice," and "respect for authority" (scientific or religious).

These three dominant values characterize most societies. As noted, many business people are rationalists, believing that facts and science should determine our policies. They are upset that the scientific basis of environmental regulation is weak, and they favour "sound science" reforms. Individualists worry most about restrictions on choice and have become disenchanted with the regulatory state. Egalitarians are obsessed with the distributional consequences of policy and champion "fairness" above all. This value is dominant among people in the activist environmental community and explains their antipathy toward economic and technological growth—both of which are viewed as especially detrimental to the least advantaged in our society. <The argument repeated ad nauseam in our newspapers is that only the wealthy can afford the education needed to produce the skills to flourish in the modern informational age. That word processing and mechanical equipment expands access to more of the workforce for more individuals (for example, dyslexic or smaller people) is largely ignored. That capitalism increases equality of opportunity and democratizes markets is again ignored. However, the link between egalitarian values and anti-progress views is fairly modern; the old left—the Marxists, for example—favoured such changes. The shift may reflect the growing pessimism among the chattering classes about their future power. Marxists believed that history was on their side; thus, they welcomed economic and technological change. Some modern environmentalists are not so sure, and thus view change far more negatively. Those favouring environmental goals might well be persuaded that progress favours their views—but for many on the left, such arguments must be framed in egalitarian terms if they are to prevail.>

Too often, business communication neglects the value aspect of the debate, making arguments that appeal to business itself rather than the opponents of business. Egalitarians don't care what you know until they know that you care—and the reform coalitions have done far too little to indicate that they do indeed care. Values trump everything in a world of rational ignorance.

Lesson 4: Policy victories are generally coalition victories

The political battlefield is a complex place. Wars are fought between and among interest groups, but the conflict takes place in a multi-tier fashion. In modern democracies, victories require both a moral and an economic attack —both a ground and an air game, as it were. A coalition of ideological and economic interest groups is needed to win the battle. A victory must be seen as advancing the general interests of the nation—and be morally justified. Victories that occur without moral legitimacy rarely prevail.

In the colourful terms of American politics, such coalitions are known as "Baptist and Bootlegger" coalitions. The term arises from the frequent struggles in political jurisdictions to legalize the sale of alcohol, to repeal Sunday closing laws that shut down local bars and liquor stores. The bootleggers—the economic beneficiaries of these regulatory restrictions—aren't the visible opponents of these measures. They leave that to the do-gooders or Baptists—those morally offended by the "legalization of sin." Still, the bootleggers eagerly support such campaigns. Such coalitions are often the key to change, for good or bad, in the political process.

That bootleggers would be adversely affected by an end to prohibition is unlikely to prove the most effective argument. For similar reasons, arguments that current policies increase costs and shrink profit margins in industry are unlikely to win public support. Indeed, it seems that the intent of many environmental policies is not so much environmental protection as to inflict pain on the business community. Many in the modern environmental movement do not like mining of any sort; to them it is incompatible with the world they seek. They want regulation to put mining out of business.

Consider the oil industry. Oil companies spent tens of millions of dollars over decades seeking to inform Americans of the value of oil exploration both offshore and in Alaska. They sought to highlight the jobs, taxes, and wealth that would be lost if bans on exploration were continued and expanded. But these arguments had no impact on environmental opposition; indeed, such arguments may have strengthened their opposition. After all, if penance is the goal, then a greater sacrifice is preferred to a smaller one. Christ drove the money changers out of the temple; the environmentalists seek to drive industry out of nature!

If arguments of this sort are to prove useful, they must be made by parties more credible than industry, and they must not focus on the costs to business but rather on the impacts that policies have on fairness. A moribund society with lagging economic and technological growth will offer far less opportunity and be far more hurtful to the poor than a dynamic and growing economy. To be successful, industry needs allies who can credibly make this argument.

One solution

Let me demonstrate this approach with an example from the pharmaceutical industry. It is plagued by the US Food and Drug Administration which delays the approval of new drugs (not unlike the mining industry's problem with delays in permitting new mines). Pharmaceutical firms clearly lose from such delays, but these monetary arguments are beside the point. The FDA claims that its reviews are critical to prevent disasters like the thalidomide tragedy. In a money-versus-lives debate industry has continually lost.

My institute tried a different approach—one that changed the debate from money-versus-lives to risks-versus-risks. We asked a previously unasked question, "If the FDA approves a drug that will save lives tomorrow, how many people died yesterday waiting for the FDA to approve the drug?" Yes, technology entails risk, and we should be concerned about such risks; but the lack of technology also entails risk. The challenge of society is not to make the world safe—but rather to make the world safer by balancing the risks of technological change with the risks of technological stagnation.

The simple idea that if a technology will save lives tomorrow, then some lives could have been saved yesterday, does not, of course, argue that drugs should be approved without question. But it does force the FDA to take off its regulatory "white hat" and consider the tradeoffs that confront patients and their doctors. The mining industry faces a similar challenge; mining, like pharmaceutical products, does entail risk. The message from mining should not focus on the absolute level of risk—i.e., arguing that risks are low—but whether making minerals more expensive and less available increases risk.